The European Central Bank (ECB) said that crypto-assets currently do not have any risks or threat to Europe’s economy, according to its May report.

“Even at their peak in early 2018 the outstanding value of crypto-assets was too small to give rise to concerns for the EU financial system and the economy,” the report entitled “Crypto-Assets: Implications for financial stability, monetary policy, and payment and market infrastructures” stated.

The ECB has formed an advisory committee called the Internal Crypto-Assets Task Force (ICA-TF) in March 2018 to monitor and investigate the implications and risks of cryptocurrencies on the European market. The paper analyzed the risk of crypto-assets in the areas of monetary policy, financial stability, and financial market infrastructures.

Following careful analysis, the task force found that crypto-assets do not represent an immediate threat to the Euro area financial stability at the current market size. In its ramifications for monetary policy, the report stated that crypto-assets are not effectively competing against cash and deposits at the present stage.

“Crypto-assets do not fulfill the functions of money and, at the current stage, neither do they entail a tangible impact on the real economy nor have significant implications for monetary policy,” the report stated, adding that the combined value of crypto assets is relatively small and that EU banks have no relevant crypto-asset holdings.

Currently, crypto-assets cannot be used to conduct money settlement in financial market infrastructures (FMIs). However, depending on their regulation in the future, they may enter FMIs and worsen the risk profile.

The paper still warned that although only a few merchants are accepting bitcoin as a payment method, crypto-assets are dynamic and can grow in the near future.

“It is therefore important that the ECB continues to monitor the crypto-assets phenomenon, raise awareness and develop preparedness for any adverse scenarios, in cooperation with relevant authorities,” the paper noted.

The report was released after ECB President Mario Draghi told a student earlier this month that cryptocurrencies are not currencies but “highly risky” assets.